I GREW up with really thrifty parents. Saving money wasn’t really taught to us step-by-step, rather, we observed how they did it and learned from that. When we were younger, we had coin banks made of wood, plastic, etc. In high school, our school had a cooperative bank inside the school premises which encouraged teachers and students to open an account and bankbook to handle their savings.
Those were my earlier exposure to saving which, fortunately, helped me handle my finances after college and when I started working and living on my own.
Solo living, like I’ve said in the first article of this column, gives you the liberty to organize your finances and hopefully to save. However, it’s perhaps a universal experience for twenty somethings to have a hard time saving money no matter how much the monthly salary is. The case is different for breadwinners but saving can also be quite a challenge for people in their 20s who live independently and whose family do not depend on them.
The saving tips I have below are of my personal experience and the ones I learned from my parents. They’re not perfect and may or may not work with others but they do for me.
1. Open a savings account without its ATM card and online banking app counterpart.
Others may argue about bank security and safety of this tip so just be a little wary. Deciding for a savings account should also be a sealed contract with yourself. You have to put in mind that the money from that account will only be withdrawn during a life-and-death situation. Being broke because you spent way too much on food or 10.10 Shopee shopping even before the next pay day is definitely not a life-and-death situation. Leave the savings account alone.
I advise no ATM card and online banking app so you won’t be able to use this for online shopping. Withdrawing money wouldn’t be that easy for you, too. It’s inconvenient so you would rather do it when you really, really need to. Your savings account should be kept exclusively with a bankbook or a passbook. Other banks have specific requirements for this. We will talk more about this in the next articles.
2. Live within your means.
When you’re already in your 20s and earning for yourself (or for your family), it’s important to know your value. How much are you earning? When you have figured that out, it’s helpful to have a personal system of budgeting and reality-check of your finances.
It may not be ideal to still be living in a rented house worth P5,000 per month, for example, if you only earn P10,000 to P15,000 monthly.
I’ve also learned along the way that the key to any financial decision in your 20s is “Can you afford it?” “Do you need to borrow money for it, and if yes, will it be worth it?” Doing financial decisions should leave your parents out of the picture. When you move out and decide to live on your own in an apartment, make sure you afford it monthly on your own and not rely on your parents as safety nets. Of course, they will always be there to help their children but if you always think of that, you’ll never mature financially.
3. Give yourself wise rewards for jobs well done.
We don’t want to work all year round with the main intention of just saving money. We would be like robots without a life then. Every now and then, we want to reward ourselves for a job well done. But the mistake maybe, this I am also guilty of, is on over-rewarding one’s self.
We tend to be swayed by our emotions and self-pity for working too hard that when we see something nice, we immediately add it to the cart without thinking, and telling ourselves “I deserve this.” That’s a spur of the moment and most often than not, the item bought would be lying in the room waiting to be used.
Guide questions when purchasing anything that’s not a daily essential (My father taught me this trick, not to discourage me from buying but perhaps to be wiser with my purchases):
* Do you need it?
* Do you really, really need it?
* Is this going to be a long-term use?
* Are you sure?
* Will there be more affordable alternatives, but almost the same quality?
4. If you can, get a second or a third job.
In our 20s, the concept of Ikigai is always in our minds. We have this notion that what we want to do should align with what pays well, what can help the community/society, etc. But in reality that rarely happens.
Maybe you are a visual artist but ended up working in an accounting firm from 8 a.m. to 5 p.m. because that’s what pays well. Or maybe you decided to be an arts teacher to follow your passion but later on realized it doesn’t pay the rent. My personal experience tells me that you don’t need to abandon one or the other. Compromising is good as long as it’s not your happiness that is compromised.
If the job that you love doesn’t pay well, maybe it’s time to accept side hustles, online writing jobs on the internet, or any other part-time jobs that you would enjoy. When you do this, make sure you have a good talk with the management of your main job to understand the terms and conditions.